Wholesaling in Detroit-Questions-Possible contract ??

Question

THE ISSUE :Okay so I’m going to ask the dumb question. I been wholesaling going on a year and majority of my deals were out of the city of Detroit except one.I’m having trouble closing deals in the city. I’m still learning the hot zip codes but even then it’s based on the how the block look (if it’s brick, tenant occupied and etc) . It seems I get the property in my eyes low but won’t get bites on it. I have two properties right (48204 and 48224) where both sellers are asking $14K. The problem is I don’t to get under contract just to not find a buyer and back out.MY QUESTION?I need help analyzing deals in the city of Detroit (so I’ll know when a property is a good deal or not). What things to look for? What areas to avoid?ANY HELP WOULD BE APPRECIATED

Alex K. · Answer

@Jerrel Jones you need to know your market before you sign a deal or even go look at a property. It needs to be in a desirable neighborhood. Wholesaling is a great method to raise capital and come across deals. I do some wholesaling myself but only take on the ones where I know I can push easy and I understand not every lead is a deal. Detroit can be tough if you don’t know The Ins and outs. Many people are successful in Detroit as well but there’s many factors that come into play in being successful in wholesaling. Knowing your market and your numbers is a great place to start.

Travis Biziorek · Answer

Hey Jerrel, I'm not a fan of wholesalers for a number of reasons.First, like you mentioned, they don't seem capable of analyzing a deal. If you can't do this you simply won't have success... at least not any repeatable success. Sure, you may sell one or two deals to an uneducated buyer, but they'll have a poor experience and never be a repeat customer for you.I can't tell you how many "wholesale" deals I've been sent for $30k or $50k that need $10k-$15k of work and would still be worth $30k to $50k. I will never do that deal because it leaves zero equity for me when I literally do all the work.Second, wholesalers are lazy. I get the same listings and large lists of properties from different wholesalers. Sometimes these guys are trying to just sell stuff from the MLS. It's pretty pathetic and shows zero effort. Third, they take zero time to get to know their customers (cash buyers) and rely on a spray and prey method. Finding a bunch of garbage "deals" and spamming a list of cash buyers might work once in awhile, but again you aren't going to have repeat success with this method. You would do far better finding a handful of serious buyers, talking to them to get to know what they're buying and what they want to buy, and going out in those areas and finding them screaming deals.If you can do that, you'll have a repeatable process and work far less. I'm happy to properly compensate a wholesaler for doing the leg work in finding me a deal. The problem is I have yet to find a wholesaler that has brought me something I'd buy either because it doesn't fit my strategy or because it's not actually a true wholesale deal.Check out Todd Chunn and his crew over at Vylla: https://www.vylla.com/They do a ton of wholesaling and have "boiler room" days where they cold call leads. If you're looking for mentorship that's likely a great place to start.

Jay Jonez · Answer

@Alex Detroit hey Alex I completely agree with you. That’s why I feel a little uncomfortable putting in under contract. I may just team up or get a referral fee from one of the guys doing deals in Detroit. I been doing well in the Metro Detroit (everywhere else except Detroit) market and may just need to focus on that .

Dushana Ejova · Answer

Hi,Travis! I am feeling pretty bad after i read your post. I really want to fix& flip houses, i am so ready,but i don't have any capital to start with. That's why i start to think,how to do some wholesale for profit and then i can start fix&flip a house. You are right, this job looks so lazy! I agree with you! And i am feeling bad because i am a hard-working woman, i love to work. Any idea how i can start to do this business? I love to do this really!

Jay Jonez · Answer

@Travis Biziorek hi thanks for your reply I do agree with you on some of The Points. That’s exactly why I want to make sure I get something good in the city. I don’t have a problem with Metro Detroit properties just seems Detroit ones. I been to a few of the boilers room there great helped me to comfortable with cold call with Todd. Me and Todd actually closed a deal to gather in February he’s a great resource.